A 130-year-old yarn company with cutting-edge social media participation? Now that’s not something you hear every day. Lion Brand Yarn, a retailer of yarn and knitting and crochet patterns, has woven together an impressive social strategy—one that got the attention of Forrester Research analyst and Groundswell author Josh Bernoff. At this year’s Forrester Consumer Forum, the firm presented Lion Brand with a prestigious Groundswell Award (see “This Year’s ’Swell Set,” Insight) in the category of “Talking.” “Who would guess a yarn company would win, out of 41 entries?” Bernoff joked.

Ilana Rabinowitz, Lion Brand Yarn’s vice president of marketing, says that the company had an inkling that a portion of its customer base spent a lot of time online, based on high levels of engagement with various tools on the company’s Web site. With the goal of enhancing relationships with its online consumers, Lion Brand turned to Converseon, a Web 2.0 marketing communications agency, for help with social media marketing.

“Converseon’s approach is always, ‘First get out there and see what’s happening in social and listen to what’s going on,’” Rabinowitz says. Lion Brand and Converseon also took to surveying customers on their social networking participation. They found that not only were its customers involved in social media, but they were a highly passionate bunch. In the fall of 2007, the company launched a “YarnCraft” podcast project, focusing on knitting and crocheting topics. The podcast has since generated more than 20,000 downloads.

In April 2008, Lion Brand extended its reach by creating a blog called “Lion Brand Notebook.” Run by a handful of Lion Brand employees, the blog features posts such as “Knit-Alongs.” “A lot of what we are doing is replicating in a virtual way what happens in normal social physical interactions,” Rabinowitz says.

One such Knit-Along generated about a thousand comments from blog visitors. Rabinowitz says that in addition to high traffic, the blog seems to help humanize the company. “The blog has been a terrific experience for us because before we started blogging and podcasting, we were basically ‘a corporation’ to people,” she says. “There were no faces of the people at Lion Brand.”

Now people know individuals at the company, she says, and communicate with them as they would with other knitters, rather than as retailers. “We come across much as we are, which is as a group of people [who] are passionate about the products and the craft,” Rabinowitz says.

Lion Brand’s social efforts have not only allowed the company to connect in a new way with consumers, but also have increased conversions. Testing indicates that those coming to the e-commerce site from the blog converted at a rate 41 percent higher than the brand’s average traffic. Customer survey results show that those who have interacted with Lion Brand socially are 83 percent more likely to identify as “very loyal” than those not engaging with the company’s social media outlets.

Rabinowitz says the cost-saving elements are substantial, as well. “We are comparing what it would cost us to get this [traffic] from a banner ad or other ways we might spend money online and based on the costs, these are now very high referring sites,” she says. “We are getting the traffic that would cost us thousands.”

With Converseon’s analytics engine, Lion Brand is listening to conversations and interacting when possible. “In the past, we would be relying on emails. Now it’s this immediate constant conversation and you learn so much,” Rabinowitz says.

The Payoff

Thanks in part to Converseon’s analytics engine, Lion Brand Yarn:

developed a podcast that regularly has 15,000 to 20,000 downloads and a blog that attracts tens of thousands of readers each month;

surveyed 30,000 customers, with results indicating that those who interact with the brand through social media are 83 percent more likely to identify as “very brand loyal” than nonusers of social media, and are also several times more likely to recommend the brand to others;

analyzed traffic to show that visitors arriving via social media convert at a much higher rate than those from other channels (such as email marketing and banner ads);

saw traffic coming from the blog to its e-commerce site convert 41 percent more often than the site’s average traffic; and

achieved an average per-visit value of traffic between June and July 2009 that was 39 percent higher than the site average.